On New Year's Eve the Mayor and Transport for London will be providing free all-night transport on the Tube and buses. There will also be through the night overground rail services, including extra trains between midnight and 2am.

For the first time, the central London Congestion Charge is also being suspended for the three working days between Christmas and New Year, including New Year's Eve.

"I want Londoners to celebrate New Year's Eve in any way they wish and be able to get home safely," said Mayor of London Ken Livingstone. "Jack Morton Worldwide, who staged the opening and closing ceremonies for the Athens 2004 Olympic Games, are designing and producing this year's free fireworks display at the London Eye. This builds on last year's celebrations and is part of a wonderful season of things to do all over the capital throughout December and January. The display will be seen by tens of thousands of Londoners around the viewing area and be visible in other parts of the city."

The fireworks display at the London Eye will take place at midnight and is planned to last around ten minutes. Screens in Trafalgar Square and Parliament Square will also be erected to carry safety messages and enable people to see the display.

Olympic-themed images will also be projected onto the Shell Centre to promote London's bid to host the Olympic Games in 2012.

Once again the Mayor is discouraging Londoners from turning up to watch the display in person: "The best thing people could do is go to one of our restaurants or pubs and enjoy yourselves."

Mr Livingstone told the BBC: "It's only going to be about 10 minutes and it is equally easy to watch it on TV in the comfort of your own home with friends, or from one of the bars that will no doubt have the television on, or the screens we will have in Trafalgar Square and Parliament Square. If you all crowd into one space you will eventually, once you get to 50,000 people, have to start turning people away."

Conservative London Assembly culture spokeswoman Angie Bray said: "For four years Ken Livingstone has proved a real party-pooper. How are we going to convince the International Olympic Committee we can organise an Olympics in London if we can't even manage a New Year's Eve party?"